Tommy Morris v. Salvatore Nuzzo
2013 U.S. App. LEXIS 10473
7th Cir.2013Background
- Estate sues Nuzzo in Ohio and Mid-Century; accident in Brown County, Indiana, 2004; claim under Mid-Century policy for $50,000.
- Estate obtained verdict against Sampson and assigned rights against Mid-Century to Estate.
- Estate filed bad-faith and contract claims in Ohio; case removed to Northern District of Ohio and then transferred to Indiana.
- District court held Nuzzo fraudulently joined to defeat forum defendant rule; granted dismissal of Nuzzo’s claims.
- Court concluded removal proper notwithstanding forum defendant rule; Estate sought remand; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did removal comply with the forum defendant rule? | Estate argues removal violated 28 U.S.C. § 1441(b)(2). | Mid-Century/Nuzzo contend fraudulently joined Nuzzo to defeat removal. | Forum defendant rule nonjurisdictional; removal proper overall. |
| May fraudulent joinder extend to a diverse resident defendant? | Estate asserts doctrine applies to diverse forum defendant. | Nuzzo and district court rely on extension to defeat removal. | Court declines to decide extension today; determines Nuzzo not fraudulently joined. |
| Was choice-of-law properly analyzed within fraudulent joinder? | Ohio law should govern if Ohio has significant relationship; district court erred. | Choice-of-law necessary to predict state court outcome. | Choice-of-law analysis permitted as part of fraudulent joinder; Ohio law would apply to bad-faith claim. |
| Did the district court properly apply choice-of-law rules to determine Ohio law? | District court erred in applying Indiana law from §145 and Restatement §6. | Indiana/Ohio factors favor Ohio for predictability; proper test used. | Court found there was a reasonable possibility Ohio would apply Ohio law; not fraudulent joinder. |
Key Cases Cited
- Poulos v. Naas Foods, Inc., 959 F.2d 69 (7th Cir. 1992) (fraudulent joinder standard; heavy burden to show no possibility of recovery)
- Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752 (7th Cir. 2009) (fraudulent joinder framework; disregard in-state defendant for diversity)
- Wilson v. Republic Iron & Steel Co., 257 U.S. 92 (Supreme Court 1921) (fraudulent joinder of resident co-defendant; removal rights)
- Hurley v. Motor Coach Industries, Inc., 222 F.3d 377 (7th Cir. 2000) (forum defendant rule is nonjurisdictional)
- Wecker v. National Enameling & Stamping Co., 204 U.S. 176 (Supreme Court 1907) (removal rights should be vigilantly protected; abuse prevention)
- Edwardsville Nat'l Bank & Trust Co. v. Marion Laboratories, Inc., 808 F.2d 648 (7th Cir. 1987) (transfer under § 1404(a) and choice-of-law considerations)